The Rural Garbage Crisis and

Solid Waste Management Authorities in New York*

I. Introduction: The Plight of New York’s Rural Counties

In May, 1999, the Chairman of the Cattaraugus County Legislature wrote to New York City Mayor Rudolph Giuliani requesting that the Mayor confirm reports that he promised not to export the city’s garbage without the consent of the host community. The Chairman was concerned that his county would receive no benefit from its success achieving a 40 percent recycling rate because a 3,000 ton per day landfill in Farmersville, Cattaraugus County, was being proposed, and “the main (if not the only) reason the proposal is moving forward is to take New York City garbage.”

Mayor Giuliani’s office responded by letter acknowledging that “New York City would never send its waste to a community that does not agree to receive it,” but explaining that this policy is limited to “the local governments and the private sector companies involved.” This response confirmed the Chairman’s fear that New York City’s waste export policy disregards the consent of host counties because, unlike towns, under New York law counties generally lack approval authority in the siting of landfills. If the host town and “the private sector companies involved” could strike a deal, the county would be powerless to control local waste.

Since then New York City’s waste “export” policy has zeroed in on upstate New York towns. The City’s only landfill, Fresh Kills Landfill, is now closed pursuant to state law, and on March 14, 2003, the City’s sanitation commissioner announced, “We want a landfill,” looking for an upstate host community as part of a comprehensive “long-term disposal plan, a barge-transport system in which trash would be packed into sealed cargo containers at transfer stations in all five boroughs.” On May 23, 2003, New York City Mayor Michael Bloomberg said, “If there was an upstate community that had a rail line going through it that was willing to do it, we could solve that little community's tax problems forever.”

New York City’s eye on potential upstate landfill host communities illustrates the plight of New York rural counties that wish to regulate solid waste. Expensive “state-of-the-art” technology ensures that modern commercial landfills will be regional facilities, drawing waste primarily from major urban centers hundreds of miles from the facility. Yet, notwithstanding such technology, all modern landfills pollute surrounding groundwater. Counties and multi-county regions asked to host such facilities therefore have greater stake health and safety interests than in the past, when New York had hundreds of active but small town dumps. Today there are less about thirty active landfills in the state. But the real story is the distinction between local landfills, generally publicly-owned, and private commercial landfills. Modern commercial landfills are generally several times larger than publicly-owned landfills. In 1998 in New York there were twenty publicly owned landfills which accepted on average about 100,000 tons. By contrast, the five major existing private landfills in the state accepted on average over a half-million tons of garbage in 1998. Current DEC policy promotes larger regional landfills by encouraging increased permitted capacity at existing private landfills.

Despite their substantial public health and safety interests in the regulation of solid waste disposal facilities, counties in New York lack authority to regulate the siting and operation of landfills. However, towns and the state have parallel power to decide whether such a facility is permitted. A state permit will be granted where a landfill proposal meets “the minimum applicable requirements” set forth in regulations promulgated by the DEC. Towns can impose more stringent requirements, up to an outright ban on landfills, but generally lack the resources to determine what requirements are appropriate, or what their powers are. Unlike private developers, local governments are not afforded any technical assistance by the DEC, are generally unable to gain access to technical communications between the DEC and the landfill developer, and face expenses for independent technical review of the developer’s environmental impact statement that are prohibitive, making meaningful participation in the state’s permit review impossible.

In New York, counties possesses the power to regulate solid waste disposal facilities only where the town has no local law relating to the field but the county does. For example, in Cattaraugus County, although the county has a law setting forth stringent standards for landfills, because the Town of Farmersville also has such a law the county’s law has no effect on a proposal to site a landfill in the town.

Moreover, the massive landfills sited under this process will remain substantial financial burdens on rural communities for years following the 30-year post-closure period during which under current regulations the private developer bears limited responsibility.

Rural areas need waste management facilities such as landfills, but public control of a landfill in such areas would provide a more environmentally and economically beneficial alternative to the siting of merchant landfills. However, to secure these benefits the siting of a publicly controlled landfill needs to be coupled with a regional method for restricting the flow of extra-local waste so as to close the door to the siting of large merchant landfills and ensure the flow of local waste to a locally designated facility.

A county-wide or multi-county regional public authority can achieve this result by legally monopolizing solid waste management services and maintaining the resources to defend its authority to do so. County or regional solid waste management using this mechanism carefully can take advantage of flow control powers that can be delegated under New York state law without running afoul of recognized limitations imposed by the Commerce Clause and antitrust laws. This paper discusses the basis for and potential challenges to the power of public waste management authorities to achieve local control of the siting, operation, and post-closure care of landfills.

II. The Power of Solid Waste Management Authorities

There are currently seventeen public solid waste management authorities, each created by special enactment of the state legislature under New York Public Authorities Law, Title 13. If set forth in their enabling legislation, a solid waste management authority will have flow control power, notwithstanding town board powers within the authority’s jurisdiction. Such powers of a county would otherwise be valid only in the absence of similar city, village, or town regulation within the county.

Solid waste management authorities in New York derive flow control power from several sources. Unless otherwise limited by federal enactment, the power to regulate for the health, safety, and welfare of its citizens (the police power) is retained by the states. The State of New York therefore has the power to delegate police powers to public authorities such as a solid waste management authority. Solid Waste management authorities are accordingly created by state enactment, the terms of which lie with the plenary power of the Legislature.

In New York the police power is ordinarily delegated to municipalities unless superceded or preempted by state enactment. State concern with waste management and public health justifies the special enactment creating a solid waste management authority.

Specific powers differ substantially among the currently existing solid waste management authorities. Where specific terms are included in the enabling legislation, an authority may seek to enjoin municipalities within their boundaries from violating authorized flow control commandments or the contracts predicated upon such commandments, and may enjoin a member municipality from withdrawing from the waste management authority without a subsequent act of the state legislature.

III. Limitations on Local Flow Control Power

Solid waste and solid waste processing services have been declared by the Supreme Court to be an article of commerce and thus subject to the protection of the Commerce Clause. Garbage processors have traditionally relied on the Commerce Clause and antitrust theories to challenge local enactments to control or ban the siting of merchant waste management facilities. In addition, in New York claims of state preemption or inconsistency with allegedly overly restrictive local legislation have been brought. However, none of these claims have ever succeeded in any landfill case that has reach judgment in litigation in New York. Instead, feeling themselves unable to sustain prolonged litigation, towns and counties faced with a lawsuit often settle with a landfill developer by, among other things, amending local laws or abandoning local regulatory powers by entering into a contract with the developer. These cases should end in summary judgment for the municipality early in the litigation, because the law supporting local flow control power is so strong. The following subsections briefly review current law on each of the common challenges to local flow control power.

A. State Preemption and Local Inconsistency

Because New York Environmental Conservation Law contemplates the formation of local and regional solid waste management authorities with control over the flow of non-hazardous waste within the boundaries of the authority, including the power to prohibit importation of garbage, and because public waste management authorities are created by special state statute, there can be no state preemption or inconsistency problem posed by more stringent restrictions imposed by such authorities.

B. Antitrust Challenges

New York courts have held that state enabling legislation authorizing waste management authorities supercedes N.Y. General Business Law § 340, which prohibits arrangements in restraint of competition. However, the Sherman Act prohibits such arrangements if they have "a not insubstantial effect on interstate commerce." Since a rural area’s potential effect on interstate commerce in waste is n minimal, it is unlikely that the threshold to Sherman Act jurisdiction can be met in any challenge to the powers of a rural solid waste management authority.

Antitrust challenges to municipal flow control laws have regularly crashed on the rule of Parker v. Brown, which provides that state action is exempt from antitrust liability. Local governmental entities will enjoy Parker immunity if their actions are taken pursuant to a “clearly articulated and affirmatively expressed” state policy and are “actively supervised” by the state courts. Solid waste management authorities should easily meet this test, because they are creatures of state legislation and subject to judicial review for compliance with the terms of their enabling legislation.

A New York waste management authority met this test in Waste Stream Management, where local flow control legislation enacted by the St. Lawrence County Solid Waste Disposal Authority was held to be immune to challenge under an antitrust theory. The Waste Stream Management court relied on the following provision of the New York statute creating the public authority:

the authority and all other municipalities within the county shall have power to adopt and amend local laws imposing appropriate and reasonable limitations on competition including, without limiting the generality of the foregoing, as to [sic] the application within the county of local laws requiring that all solid waste generated or originated within their respective boundaries, subject to such exceptions as may be determined to be in the public interest, shall be delivered to a specified solid waste management facility.

Where flow control powers are expressly included in its creating statute, waste management authorities will therefore enjoy a strong shield against antitrust challenges.

C. Commerce Clause Challenges

The waste industry has exploited mercilessly the assertion that garbage is an article of commerce protected by the U.S. Constitution from “discrimination” by local flow control, based on the Supreme Court’s 1994 Carbone case. However, Carbone never said that; instead, the court held that waste management services rather than garbage were protected commerce, and it acknowledged that waste management was traditionally and should continue to be locally controlled. Thus, following the Carbone decision, the federal appellate court for New York held, “Legislation pertaining to public health and safety consistently has been recognized as an important local interest,” and “problems experienced with the disposal of other waste as well as the [local governing body’s] concerns that the DEC’s regulation of [similar] landfills would prove to be inadequate” is enough to support a local restriction to a designated landfill. Two years after Carbone, in USA Recycling, Inc. v. Town of Babylon, the same court said when a town excludes all but those service providers it contracts for, such governmental action is non-discriminatory, even when a single service provider is hired. This is because the municipality’s primary purpose is to provide waste collection and disposal services to local citizens, a delegated function under New York law, and since it “could readily result in the hiring of an out-of-state garbage hauler” such a “waste management system treats all garbage haulers alike.” In other words local flow control, done properly, involves the same kind of permissible discrimination in favor of a selected service provider that any business participating in the open market for services is allowed. Because there is in the U.S. Constitution’s Commerce Clause “no indication of a constitutional plan to limit the ability of the States themselves to operate freely in the market,” governmental entities participating in the market are regarded as proprietors rather than as regulators exercising sovereign powers, permitting such governmental entities to avoid Carbone's Commerce Clause analysis.

D. Local Landfill Designation and the Market Participation Defense

The market participation exception to Commerce Clause limitations on governmental activities has justified a county-owned landfill in Pennsylvania charging higher disposal fees and imposing restrictive volume limits for waste generated outside a surrounding six-county region.

E. Permissible Flow Control

In New York, following Carbone, the Second Circuit actually embraced what it called “economic flow control” as a means of “evading Carbone.” The court explained that, if a municipality offered cheaper tipping fees to local haulers at a governmentally-owned solid waste management facility financed through a combination of tax revenues and public bonds, it would be exercising its powers as a participant in the open market. Such conduct falls short of “regulation” since private haulers enter voluntarily into arrangements restricted by conditions laid down by the governmental entity. Because government conduct like this is in the nature of contract within a field of commerce, not regulation of the field, it is not even subject to a Commerce Clause analysis.

Because such an arrangement is, as a matter of law, non-discriminatory, a local public entity can offer disparate economic treatment to in-district and out-of-district users of its facilities, respectively. For example, the USA Recycling court approved a $240 per ton fee to out-of-district users of an incinerator while offering the same service to in-district users for no charge. In 2001, this approach was greatly expanded for a solid waste public authorities in United Haulers Association, Inc. v. Oneida-Herkimer Solid Waste Management Authority, which the U.S. Supreme Court let stand the following year.

          In United Haulers a lower court ruling that two county flow control laws were unconstitutional under Carbone was reversed. Oneida and Herkimer counties are joint members of a single solid waste authority. To avoid potential liability under the Superfund law as “transporters” to a commercial landfill, the counties enacted ordinances requiring that all waste generated within either county be delivered to one of several publicly owned facilities for ultimate disposal by a private bidder. This effectively forced all haulers operating in either county to use the solid waste authority’s facilities, providing the authority a guaranteed revenue stream. A waste industry group argued that the ordinances unconstitutionally regulated interstate commerce, since the haulers were barred from accessing a significantly cheaper interstate market for waste disposal.

          The court held that, by imposing penalties on haulers for violation of the ordinances, the counties invoked their sovereign authority and thus did indeed regulate the market for waste collection and disposal, affecting interstate commerce. However, the ordinances did not discriminate against out-of-state interests; since all waste was directed to publicly owned facilities, all haulers operating within the authority’s jurisdiction were treated alike. The disadvantage from the ordinances did not fall more heavily on out-of-state concerns than on local ones.

The day after the Supreme Court let the decision stand, neighboring Madison County passed a flow control law forcing all county waste to its landfill, increasing revenue $500,000 annually.

IV. Conclusion

While Carbone addressed the limits of local regulatory powers over waste management as an article of commerce, it left undisturbed the traditional role played by states and local governmental entities in the siting and operation of waste management facilities. The latter functions remain under the police power as a matter of local concern. However, legal challenges to local control of waste management are generally successful not because the law supports such challenges, but rather because small towns cannot afford to litigate such claims against them. However, counties generally have greater resources and, under the recent United Haulers decision, should be able to dispose of legal challenges early in any litigation, at the summary judgment stage, or (since that decision may make such challenges frivolous) head off such challenges altogether before they are brought to court.

Solid waste management authorities in New York now provide for non-regulatory state action beyond the reach of antitrust theories, and may legitimately exercise control of intra-district waste. In rural areas, such flow control will have an insubstantial effect on interstate commerce. Beyond their power to achieve beneficial flow control, however, such authorities enjoy the ability to pool regional resources to defend their exercise of that power, and to insist on local consistency with a flow control policy.